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May 02, 2018 - 8:00 PM
KELOWNA – A local psychologist will have to pay court costs after attempting to sue a former business partner who secured a major client just after buying him out.
Dr. John Dorward and Derek Sienko started Diversified Rehabilitation Group in February 2007, providing rehabilitation services to large companies. One of their clients, FortisBC (electric), employs 500.
Despite financial success, it didn’t take long for the relationship between the two men to sour and on May 4, 2012, Dorward sold all his shares to Sienko.
Justice Martha Devlin says in a recent decision Dorward “had become increasingly dissatisfied with the business relationship and believed he could have a more lucrative business separate from Mr. Sienko.”
Shortly after the shares changed hands, Sienko secured a contract with FortisBC (gas), which employs roughly 1,500.
Dorward admits that negotiations with Fortis Gas were ongoing at the time, but alleges his former partner withheld knowledge that the contract was all but secured.
He testified he did not expect the company would be successful in obtaining the FortisBC (gas) contract when he began negotiating a buyout in December 2011.
“Dorward testified he stopped attending the weekly meetings to discuss the FortisBC (electric) contract with Mr. Sienko as their relationship deteriorated,” Devlin writes. “Dr. Dorward testified that he knew there was a chance DRG could obtain the Fortis Gas contract but he also believed when he left DRG the services (they) provided would decrease.”
The company's office coordinator testified that Dorward told her DRG would never get the FortisBC (gas) contract without him.
In May 2012, roughly four months after Sienko bought Dorward out for $270,000, FortisBC (gas) became a client of DRG.
Dorward claimed he was unaware Sienko was negotiating with FortisBC (gas) when he entered into the sale/purchase agreement and maintains that Sienko never told him of any of the negotiations with Fortis Gas.
Dorward accused Sienko of taking “liberties with consistency” and characterized him as someone who could not be trusted to tell the truth.
Justice Devlin disagreed, saying she found him to be a “reliable and credible witness” who tried his best to make the business relationship work “despite the mounting tension and conflict.”
She was less complimentary in her description of Dorward, calling his evidence “problematic.”
“I find it puzzling that Dr. Dorward would claim that Mr. Sienko withheld information about his discussions with FortisBC (gas) yet, according to Dr. Dorward, Mr. Sienko requested Dr. Dorward’s assistance in pursuing a potential contract with another company, Tolko, during the same timeframe. If Mr. Sienko was deliberately withholding information about a new contract with FortisBC (gas) to maximize his position in the negotiations with Dr. Dorward why then would he engage Dr. Dorward in discussions about the prospect of a contract with Tolko?” she writes.
She denied Dorward’s application and ordered him to pay court costs.
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